How To Ensure Your Online Platform is P2B Compliant

Due to the increasing popularity of online marketplaces, The UK Platform to Business Regulation (P2B Regulation) came into force in the UK on 12 July 2020 (in accordance with Brexit transition agreements). 

There are three key aims of P2B regulation:

1. To regulate the relationship between the platform providers/online marketplace and the business users who use it to market their goods or services to consumers
2. To create a more transparent and predictable environment for trading through online platforms;
3. To prevent any potential imbalances, commercial inequalities and potential for abusive trade practices by platform providers controlling access to many consumers.

The driver for the P2B regulation compliments and bolsters existing competition law requirements as it seeks to prevent market distortion, promote healthy competition (without placing an administrative burden on platform providers) and address the perceived imbalance between the providers of online intermediation services and their business users.

However, we have seen an increasing trend for the migration away from apps and SaaS offerings to more holistic platform offerings. While these may not fit the traditional marketplace model (such as eBay or Amazon), they can, by the nature of their services and user experience, come under the remit of the P2B Regulation.   

The P2B Regulation applies to ‘online intermediation services’ and ‘online search engines’:

• That provide their services to business users and corporate websites that have their place of establishment or residence in the UK.
• Through which goods or services are offered to consumers located in the UK

The P2B Regulation is therefore intended to cover:

• E-commerce marketplaces (i.e. eBay, Amazon and Etsy)
• App stores (i.e. Apple App Store and Google Play Store)
• Price comparison sites (i.e. GoCompare and Skyscanner)
• Search engines (i.e. Google Search and Bing)

However, ‘intermediary services’ capture platform service offerings that provide a facility which enables other businesses (typically in return for a commission payment or subscription payment) to showcase their goods or services to consumers and transact with consumers, with the platform facilitating such transactions, for example, booking platforms or food delivery platforms.

The P2B Regulation is not intended to cover:

• Peer-to-peer intermediation services
• Business-to-business intermediation services (there must be no interaction with consumers)
• Online payment services
• Online advertising tools
• Online advertising exchanges

Platform operators must ensure that their terms and conditions are:

• Drafted in plain language
• Easy to understand
• Made readily available to business users during pre-contractual dealing and at all other times during the business relationship

Additionally, the terms and conditions must set out:

• The circumstances in which decisions are made to suspend, terminate or restrict the online intermediation services offered by the platform
• How the terms and conditions may affect the ownership and use of a business users’ intellectual property rights
• Information about any preferential treatment given to goods or services supplied by the platform provider itself or a connected party
• Include information on any other distribution channel or affiliate programs used by the platform operator to market a business user’s offering
• How a business can terminate its contract
• The parameters applied for ranking goods and services and how additional payment to the platform provider affects ranking (if applicable)
• Any exclusivity obligations which restrict the business user from selling goods and services on different terms, including reasons for any such restrictions
• Details on what data (uploaded or processed by the business user) the platform operator will continue to access and host following the termination of the contract

In addition to the contractual requirements, the P2B Regulation also imposes several operational requirements on platform providers.

The following is a summary of some of the key operational requirements which need to be implemented by platform providers:

• Ensure that business users are identifiable on the platform
• Provide business users with advance notice (at least 15 days) of changes to terms and conditions in a durable medium
• Provide business users with at least 30 days advance notice if the online intermediation services are to be terminated
• Implement and operate a complaint handling procedure
• Identify at least two mediators which can be used to settle disputes, ensuring that both mediators have relevant commercial understanding and experience

Whilst the above is only a summary of the key requirements of the P2B regulations, navigating compliance can be a tricky task for platform providers.

Failure to do so can lead to claims from business users for any loss or damage caused as a result of such failures and also a court deeming such terms and conditions null and void and, more importantly, unenforceable.